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MarketScreener Homepage  >  Equities  >  Nyse  >  Argan, Inc.    AGX

ARGAN, INC.

(AGX)
  Report
Real-time Estimate Quote. Real-time Estimate Cboe BZX - 10/29 10:42:07 am
41.17 USD   +0.29%
10/21ARGAN, INC. : Ex-dividend day for
FA
09/30ARGAN INC : Other Events (form 8-K)
AQ
09/10ARGAN : Reports second quarter results
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Argan, Inc. : Reports Second Quarter Results

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09/09/2020 | 05:17pm EDT

Argan, Inc. (NYSE: AGX) (“Argan” or the “Company”) today announced financial results for its second quarter ended July 31, 2020. For additional information, please read the Company’s Quarterly Report on Form 10-Q, which the Company intends to file today with the U.S. Securities and Exchange Commission (the “SEC”). The Quarterly Report can be retrieved from the SEC’s website at www.sec.gov or from the Company’s website at www.arganinc.com.

Summary Information (dollars in thousands, except per share data)

 

 

 

 

 

July 31,

 

 

 

2020

 

2019

 

Change

For the Quarter Ended:

 

 

 

Revenues

$

87,492

 

$

63,059

 

$

24,433

 

Gross profit

 

15,630

 

 

2,965

 

 

12,665

 

Gross margin %

 

17.9

%

 

4.7

%

 

13.2

%

Net income attributable to the stockholders of the Company

$

5,609

 

$

1,154

 

$

4,455

 

Diluted per share

 

0.36

 

 

0.07

 

 

0.29

 

Cash dividends per share (1)

 

1.25

 

 

0.25

 

 

1.00

 

 

 

 

 

 

July 31,

 

January 31,

 

 

 

2020

 

2020

 

Change

As of:

 

 

 

Cash, cash equivalents and short-term investments

$

407,628

 

$

327,862

 

$

79,766

 

Net liquidity (2)

 

270,021

 

 

277,721

 

 

(7,700

)

RUPO (3)

 

694,084

 

 

781,400

 

 

(87,316

)

Project backlog

 

1,246,000

 

 

1,334,000

 

 

(88,000

)

 

 

 

(1)

 

Quarter ended July 31, 2020 includes a special cash dividend of $1.00 per share.

(2)

 

Net liquidity, or working capital, is defined as total current assets less total current liabilities.

(3)

 

The amount of remaining unsatisfied performance obligations (“RUPO”) represents the unrecognized amount of transaction price for active contracts with customers, which is a subset of project backlog.

Consolidated revenues for the quarter ended July 31, 2020 were $87.5 million, which represented an increase of $24.4 million, or 39%, from consolidated revenues of $63.1 million reported for the three months ended July 31, 2019. The increase was primarily due to increasing revenues at Gemma Power Systems (“GPS”) associated with the construction of the Guernsey Power Station, partially offset by the Company’s businesses being adversely impacted, to a declining degree, by continuing difficulties presented by the COVID-19 outbreak.

Atlantic Projects Company (“APC”), entered into a second amendment to its loss subcontract, effective June 1, 2020 (the “TeesREP Project”). The second amendment, which includes various terms and conditions, represents a global settlement of past commercial differences with both parties making significant concessions, and converts the invoicing to time-and-materials for the remaining work. For the three months ended July 31, 2020, consolidated gross profit was positively impacted by a net $2.3 million favorable adjustment related to the TeesREP Project. Overall, consolidated gross profit for the three months ended July 31, 2020 was $15.6 million, or 17.9% of the corresponding consolidated revenues.

With results reflecting primarily the factors identified above, the consolidated net income attributable to Argan’s stockholders was $5.6 million, or $0.36 per diluted share, for the three months ended July 31, 2020. The Company paid its regular quarterly cash dividend of $0.25 per share and a special dividend of $1.00 per share to its shareholders on July 31, 2020.

As of July 31, 2020, cash, cash equivalents and short-term investments totaled $408 million and net liquidity was $270 million; plus the Company had no debt. The Company’s consolidated amount of RUPO, which represents an accounting value for active work that is a subset of project backlog, was approximately $0.7 billion as of July 31, 2020.

The aggregate amount of the rated power represented by the natural gas-fired power plants for which GPS has signed EPC contracts, including certain plants that will have the ability to use green hydrogen as a fuel, is approximately 7.3 gigawatts with an aggregate contract value in excess of $3.0 billion. For those contracts not already included in project backlog, the Company anticipates adding them closer to their respective expected start dates when the projects complete key development milestones and obtain financing commitments. For all projects, the start date for construction is primarily controlled by the project owners.

Management Comment

Commenting on Argan’s results, Rainer Bosselmann, Chairman and Chief Executive Officer, stated, “We are pleased with the continued strong performance of our employees during this COVID-19 pandemic which has been difficult for all of us. Our talented employees’ ability to adapt and adjust to the situation is clearly demonstrated in our improved financial performance, especially the increasing activities at Guernsey executed by our GPS team. The TeesREP Project has been a long and costly project for us, but we are pleased to have resolved our differences with the customer and look forward to completing the project this year, which is over 90% complete. We have over $3.0 billion in signed EPC contracts for power plant projects, and while many factors are out of our control, we are optimistic that we will receive the construction go ahead on several of these new projects over the next three to nine months. In recognition of our significant liquidity, improving revenues, sustained profitability and a substantial pipeline of future project work, the Board of Directors declared a special dividend of $1.00 during the quarter and authorized the establishment of a $25.0 million share repurchase program. We appreciate our loyal shareholders and extend our sincere wishes for safety during these challenging times.”

About Argan, Inc.

Argan’s primary business is providing a full range of services to the power industry, including the renewable energy sector. Argan’s service offerings focus on the engineering, procurement and construction of natural gas-fired power plants, along with related commissioning, operations management, maintenance, project development and consulting services, through its Gemma Power Systems and Atlantic Projects Company operations. Argan also owns The Roberts Company, which is a fully integrated fabrication, construction and industrial plant services company, and SMC Infrastructure Solutions, which provides telecommunications infrastructure services.

Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws and the Company’s future financial performance is subject to risks and uncertainties including but not limited to its ability to mitigate losses related to APC’s loss subcontract, the successful addition of new contracts to project backlog, the receipt of corresponding notices to proceed with contract activities, the Company’s ability to successfully complete the projects that it obtains, and the Company’s success in minimizing the adverse impacts of the COVID-19 pandemic on the Company’s businesses. The Company has several signed EPC contracts that have not started and may not start as forecasted due to market and other circumstances beyond its control. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to the number of factors described from time to time in the Company’s SEC filings. In addition, reference is hereby made to the cautionary statements made by the Company with respect to risk factors set forth in its most recent reports on Form 10-K, Forms 10-Q and other SEC filings.

 

ARGAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

July 31,

 

July 31,

 

2020

 

2019

 

2020

 

2019

REVENUES

$

87,492

 

$

63,059

 

$

147,640

 

$

112,603

 

Cost of revenues

 

71,862

 

 

60,094

 

 

128,001

 

 

130,664

 

GROSS PROFIT (LOSS)

 

15,630

 

 

2,965

 

 

19,639

 

 

(18,061

)

Selling, general and administrative expenses

 

9,085

 

 

10,038

 

 

19,429

 

 

19,626

 

Impairment loss

 

 

 

 

 

 

 

2,072

 

INCOME (LOSS) FROM OPERATIONS

 

6,545

 

 

(7,073

)

 

210

 

 

(39,759

)

Other income, net

 

451

 

 

1,642

 

 

1,539

 

 

3,894

 

INCOME (LOSS) BEFORE INCOME TAXES

 

6,996

 

 

(5,431

)

 

1,749

 

 

(35,865

)

Income tax (expense) benefit

 

(1,397

)

 

6,411

 

 

3,057

 

 

6,932

 

NET INCOME (LOSS)

 

5,599

 

 

980

 

 

4,806

 

 

(28,933

)

Net loss attributable to non-controlling interests

 

(10

)

 

(174

)

 

(40

)

 

(287

)

NET INCOME (LOSS) ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.

 

5,609

 

 

1,154

 

 

4,846

 

 

(28,646

)

 

 

 

 

 

Foreign currency translation adjustments

 

(83

)

 

(6

)

 

(329

)

 

(1,060

)

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.

$

5,526

 

$

1,148

 

$

4,517

 

$

(29,706

)

 

 

 

 

 

NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.

 

 

 

 

Basic

$

0.36

 

$

0.07

 

$

0.31

 

$

(1.84

)

Diluted

$

0.36

 

$

0.07

 

$

0.31

 

$

(1.84

)

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

 

 

 

 

Basic

 

15,653

 

 

15,633

 

 

15,648

 

 

15,608

 

Diluted

 

15,788

 

 

15,757

 

 

15,767

 

 

15,608

 

 

 

 

 

 

CASH DIVIDENDS PER SHARE

$

1.25

 

$

0.25

 

$

1.50

 

$

0.50

 

 
 

ARGAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

 

 

 

 

July 31,

 

January 31,

 

2020

 

2020 (1)

 

(Unaudited)

 

 

 

ASSETS

 

 

CURRENT ASSETS

 

 

Cash and cash equivalents

$

382,424

 

$

167,363

 

Short-term investments

 

25,204

 

 

160,499

 

Accounts receivable, net

 

29,660

 

 

37,192

 

Contract assets

 

26,523

 

 

33,379

 

Other current assets

 

39,645

 

 

23,322

 

TOTAL CURRENT ASSETS

 

503,456

 

 

421,755

 

Property, plant and equipment, net

 

21,692

 

 

22,539

 

Goodwill

 

27,943

 

 

27,943

 

Other purchased intangible assets, net

 

4,550

 

 

5,001

 

Deferred taxes

 

 

 

7,894

 

Right-of-use and other assets

 

3,466

 

 

2,408

 

TOTAL ASSETS

$

561,107

 

$

487,540

 

 

 

 

LIABILITIES AND EQUITY

 

 

CURRENT LIABILITIES

 

 

Accounts payable

$

41,242

 

$

35,442

 

Accrued expenses

 

36,185

 

 

35,907

 

Contract liabilities

 

156,008

 

 

72,685

 

TOTAL CURRENT LIABILITIES

 

233,435

 

 

144,034

 

Deferred taxes

 

642

 

 

 

Other noncurrent liabilities

 

2,883

 

 

2,476

 

TOTAL LIABILITIES

 

236,960

 

 

146,510

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

Preferred stock, par value $0.10 per share – 500,000 shares authorized; no shares issued and outstanding

 

 

 

 

Common stock, par value $0.15 per share – 30,000,000 shares authorized; 15,673,202 and 15,638,202 shares issued at July 31 and January 31, 2020, respectively; 15,669,969 and 15,634,969 shares outstanding at July 31 and January 31, 2020, respectively

 

2,351

 

 

2,346

 

Additional paid-in capital

 

150,847

 

 

148,713

 

Retained earnings

 

170,653

 

 

189,306

 

Accumulated other comprehensive loss

 

(1,445

)

 

(1,116

)

TOTAL STOCKHOLDERS’ EQUITY

 

322,406

 

 

339,249

 

Non-controlling interests

 

1,741

 

 

1,781

 

TOTAL EQUITY

 

324,147

 

 

341,030

 

TOTAL LIABILITIES AND EQUITY

$

561,107

 

$

487,540

 

 

(1) Amounts derived from audited consolidated financial statements.

 

© Business Wire 2020

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Financials (USD)
Sales 2021 394 M - -
Net income 2021 16,9 M - -
Net Debt 2021 - - -
P/E ratio 2021 38,4x
Yield 2021 -
Capitalization 643 M 643 M -
Capi. / Sales 2021 1,63x
Capi. / Sales 2022 0,82x
Nbr of Employees 1 154
Free-Float 95,0%
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Technical analysis trends ARGAN, INC.
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 2
Average target price 62,00 $
Last Close Price 41,05 $
Spread / Highest target 55,9%
Spread / Average Target 51,0%
Spread / Lowest Target 46,2%
EPS Revisions
Managers
NameTitle
Rainer H. Bosselmann Chairman & Chief Executive Officer
David Hibbert Watson Chief Financial Officer, Secretary & Treasurer
William F. Leimkuhler Independent Director
Champ Mitchell Independent Director
James W. Quinn Lead Independent Director
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